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Economists dispute IMF findings

Godfrey Marawanyika

THE projections by the International Monetary Fund (IMF) that Zimbabwe will record a positive gross domestic product (GDP) next year has been received with mixed view

s by local economists.

Some economists are arguing that although the Bretton Woods institutions are expecting a positive outlook they might have been given the wrong impression by government.

Others are however of the opinion that there can be a real GDP surge if government is able to stick to its policies.

Prominent economist John Robertson said he believes the IMF projections are missing the point since a number of key economic sectors are shrinking.

“I don’t believe those figures at all,” Robertson said. “Unless they believe the figures on agricultural production they were given by Joseph Made which were only publicly released last week they might anticipate a surge in GDP.

“The manufacturing sector is crumbling, even tobacco has recorded a decline. In tourism we have more informal traders coming, which is confirmed by the decline in hotel bed occupancies. The government seems to miss the major important point, which is to address issues such as human rights abuses and property violations which destroyed the economy.”

Robertson said Zimbabwe would not receive any help from countries morally interested in issues of human rights.

The IMF World Economic Outlook report anticipates that Zimbabwe’s GDP which has been on the decline since 1999, will record a 5,2% positive growth, up from a decline of 9,2% this year.

In March this year the annual IMF Article IV Consultation team warned that the country’s GDP could shrink even further.

Over the past five years, the country’s GDP has been on the decline.

Kingdom Financial Holdings Ltd (Kingdom) group economist Witness Chinyama this week said it was possible for the country to have a positive GDP next year but there had to be a serious commitment from policy makers.

“It is possible to have a positive GDP if the seriousness which has been shown over the past few months, is sustained. Inflation has over the years been the country’s major problem,” Chinyama said.

“But it should be noted that there is need for a strong adherence to the monetary policy because if we have weak monetary policy this will again result in inflation. If the speculative behaviour which had plagued the economy is contained then I will not be suprised by the projection.”

Over the past four years the country has been continuously dogged by inconsistent policy decisions from the authorities.

The situation has largely been caused by political decisions at the expense of economic stability.

“Some people are sceptical of those figures because of the past experience when things were drawn up and never followed,” Chinyama said.

“Government should stick to their policy decisions, but one thing which government should tackle head on is the international image. This is because a number of donors take their decisions based on institutions like the IMF and World Bank, but because of the Zimbabwe Democracy Bill that was passed in 2001 it would be difficult to get aid unless issues raised in Bill are addressed urgently.”

After the United States government passed that Bill which has resulted in travel bans and economic aid blockade the country has not received any foreign aid either in aid or grants.

Subsequently, the Euro-pean Union also imposed a travel ban on government officials and any form of economic assistance. The EU was concerned about the way government had handled the disputed 2002 Presidential election.

Since 1999, up until December last year, Zimbabwe has been failing to pay its dues to the IMF and other multilateral donors.

As of the end of March, Zimbabwe owed the IMF Special Drawing Rights (SDR) 196,71 million.

Zimbabwe has however committed to make US$1,5 million quarterly payments to the IMF.

Director of Labour and Economic Development Research Institute of Zimbabwe (Ledriz) Godfrey Kanyenze said what had to be addressed was the political language by some leaders when dealing with Western countries.

“It is true that the country’s GDP might increase next year,” Kanyenze said. “Even the Economic Commission for Africa has said that most African countries will record growth rates of above 3% both this year and next year. I think it is too early for the immediate resumption of credit lines until the political attacks made on the very same countries who might assist us stops.”

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